MC Insider | A peculiar disclosure, fund house's search for exit and a storm on Deal Street

It’s been a few days since this lender announced its quarterly earnings, but instead of offering clarity, a peculiar disclosure has sparked confusion in the investor community. What’s unusual is how differently the issue was communicated. The press was told a version, investors got another, and in one-on-one calls, fund managers were offered a totally different story.

The contradictions haven’t gone unnoticed. Multiple theories are floating around, and we hear the company has reached out to the regulator, hoping to put the swirling rumours to rest. But so far, no such help has been forthcoming. No one knows what triggered this, or whether it’s a one-off.

It’s no secret that this fund house has been on the block for a while now.

Almost all options have been explored -- finding a joint venture partner, an outright sale, and even a partial exit. However, none of them have been successful, and the deal is back to square one.

Now, hitting the capital market seems to be the only option left. But here’s the hitch. While the CEO is pushing for a listing, convinced it will fetch decent multiples, the promoter isn’t fully sold. The concern? If all options have failed, can public markets offer the desired valuation? For what it’s worth, the CEO has been given one last chance to roll out a monetisation plan.

Deal Street is abuzz at the jaw-dropping valuations at which this global major has doubled down on its local unit in the domestic industrials segment. Based on the stake purchase from an existing financial investor who was the JV partner, the entire firm is valued at around Rs 1.6 lakh crore, an endorsement of the sector's potential. Meanwhile, the selling stakeholder is laughing its way to the bank. Interestingly, the transaction comes at a time when a few other global MNCs, especially in the consumer and auto space, are in exit mode.  So will this deal trigger more M&A in the industrials space?